Sha Zhu's Rebirth in the Courtyard: Starting with Hitting Someone in the Head

Chapter 405 A Premeditated Plan to Create a Tremendous Advantage

In the study of the villa halfway up the mountain, the secret meeting between the He family father and his three sons continued. A cup of tea sat before He Yuzhu, already cold. The three He brothers sat opposite him, having talked for over an hour since nine in the morning.

After finishing his sentence, He Yuzhu picked up his herbal tea, took a sip, and glanced at his three sons. "He Xiao, how much idle capital is left in the group's accounts?"

"Dad, as of this month, the total amount of cash available to Zhonghuan Group, plus the idle funds on Zhonghuan Financial's books, is just over six hundred billion US dollars. This money is distributed in offshore accounts and can be accessed at any time."

After listening, He Yuzhu put the cup back on the table: "Six hundred billion? That won't be enough. I estimate that a little over four hundred billion will be enough to complete the layout, with the rest as reserve funds and collateral."

He Xin rubbed his hands together and asked, "Dad, how exactly do we plan to proceed?"

He Yuzhu didn't answer directly. Instead, he took out several folded pieces of paper from his pocket, which were filled with company names, shareholding ratios, and estimated amounts.

He placed the paper on the table and pushed it towards He Xin, and the three of them huddled together to look.

He Xiao asked, "Third brother, why are some of these ratios in the teens and others in the twenties? There's such a big difference!"

He Xin didn't hold back, patiently explaining to her two older brothers and making all the core logic crystal clear.

"Big brother, second brother."

"That's what makes Dad so amazing. Every single number is calculated precisely according to the laws and regulations of various countries."

"American technology companies, involved in chips, the internet, and core technologies, face extremely strict foreign investment scrutiny."

"Our maximum stake can only be between 17% and 25%. This avoids crossing the 30% threshold for mandatory takeovers. It allows us to be the largest single shareholder, securing board seats and veto power over major decisions, without triggering any government-level intervention or investigation."

"In the US, companies in consumer goods, daily chemicals, and beverages, which pose no national security risks, are subject to lax regulation. We can capture 27%-29%, almost reaching the ceiling for private shareholding. This allows us to obtain the maximum dividend rights and say in the company."

"Europe is different."

"In many European countries, the government holds shares in gold mining companies. No matter how many shares you hold, the government retains a veto right."

"Therefore, we control European industry and energy at 15% to 20%, which is the most cost-effective way to avoid risks and regulatory scrutiny."

"The most difficult ones are Japan and South Korea."

Japanese and South Korean conglomerates have had cross-shareholding for a century, resulting in extremely high barriers to domestic capital and a strong aversion to foreign investment. Any investment exceeding 10% requires government approval.

"Therefore, all the leading companies in Japan and South Korea are controlled within 10% to 15%. By becoming the largest foreign shareholder, they can secure profits and rights without directly violating local regulations."

His words were clear, logical, and well-organized.

They control the lifeline, reap all the benefits, and never invite trouble.

He Xiao and He Chen suddenly understood after listening.

It turns out that my father's seemingly simple list of shareholders concealed a great deal of intricate cross-border capital games.

To the untrained eye, it's just buying stocks.

To the experts, this is a top-tier power structure that precisely grasps the economic rules of countries around the world.

He Yuzhu gave the final verdict: "Remember this."

"We're not speculating on this 400 billion, nor are we profiting from short-term price differences. We're using this century-long crisis to bind the top companies in every country and industry around the world to the He family."

"We don't have absolute control over any of them, but we are top-level shareholders in every one of them. The He family's influence is felt in the profits, development, and decision-making of each company."

From now on.

"American technology, European industry, Japanese and Korean manufacturing, global resources, global consumption, and global pharmaceuticals."

"Who controls half of the world's economic lifeline?"

He Yuzhu's gaze remained calm as he began to explain the upcoming timeline, focusing solely on predictions and deductions.

"It's December 2006 now."

"The situation is clear, and I have a very clear prediction of the global trends over the next three years."

"I don't know which specific organization will collapse first; no one can pinpoint it in advance. But the data doesn't lie."

Starting next year, a large number of financial institutions in the US that provided subprime mortgages are expected to report huge losses and gradually succumb to the pressure and run into trouble.

"At first, the market will only see it as a problem with the operations of individual companies, and no one will associate it with global risks. By the time everyone realizes that it is a systemic crisis, the global financial market has already collapsed by more than half."

As a professional, He Xin was very meticulous and immediately grasped the key point, taking the initiative to ask for instructions.

"Dad, since the risks are expected to surface next year, how should we proceed? How much capital do we need to test the waters and build positions? And how much profit can we expect to capture from this wave of subprime mortgage risk next year?"

He Yuzhu already had a plan in mind, and calmly gave his prediction, all in a macro-level deduction tone, without revealing any trace of rebirth.

"Next year, we will only lay the groundwork and will not heavily invest in bottom-fishing stocks. The core operation is only one: to deploy subprime hedging tools and profit from the panic caused by this wave of institutional defaults."

"Based on my calculations and projections."

"We will start building positions early next year, gradually increasing our holdings as the risks escalate, until the crisis materializes at the end of 08."

"We will first use $40 billion, plus special hedging positions, and estimate that we can capture $120 billion in net profit."

"After the first round of turmoil, our available core capital has grown to more than 500 billion US dollars."

These words deeply moved the three brothers. Over a hundred billion in net profit was merely an appetizer to appetize the crisis.

This doesn't even include the ultimate gains from buying up global giants at rock-bottom prices in 09 and locking in their eternal foundation.

He Xin understood instantly.

The father's strategy was meticulous, progressing step by step, building momentum at every turn. He accumulated resources in 07, capitalized on the market crash in 08, and secured the bottom in 09, achieving legendary status without a single unnecessary or misstep.

He Yuzhu coughed twice, bringing the three of them back to their senses.

"Let me make this clear. This whole situation cannot be managed by He Xin alone."

"Starting next year, all three of you brothers will be fully committed to this matter. There will be a clear division of labor, and you must cooperate with each other. No one can be left out."

He looked at He Xiao, his tone solemn.

"He Xiao, you are in charge of the entire Zhonghuan Global Group. You don't need to monitor the specific trading activity."

"Your core task is to oversee the overall situation and control the overall pace. All fund transfers, position ratios, risk limits, and compliance approvals are ultimately under your control."

"Prevent He Xin from acting impulsively, prevent his subordinates from acting on their own initiative, and prevent unbalanced positions and violations of regulations. Overall risk control and the overall market rhythm are your responsibility."

He Xiao nodded emphatically. "I understand, Dad. I will keep a firm grip on the overall situation."

He then looked at He Chen.

"He Chen, you will be in charge of science and technology innovation and the real economy. You will not be involved in financial operations. Your task is to closely monitor the dynamic public opinion, operating data, and industry changes of all overseas technology giants, electronics industries, and real economy enterprises."

"During the crisis, you were the first to screen and report which companies were merely short-term victims of panic selling and which suffered fundamental damage. Your intelligence will be crucial in determining our future core holdings, as we heavily invest in technology stocks."

He Chen's eyes were firm. "Understood. I will keep a close eye on overseas entities and technological developments to ensure no information is leaked."

Finally, He Yuzhu looked at He Xin.

"He Xin, you will be responsible for the implementation of all aspects of SPV architecture setup, channel integration, trial trading and position building, phased position averaging, contract hedging, and market operations."

"We will immediately begin laying the groundwork and testing the waters with small positions by the end of the year."

"Starting in 07, as the US subprime mortgage crisis unfolded, we steadily and systematically increased our positions, avoiding rash actions, greed, and missing opportunities. All operations were reported to He Xiao for approval beforehand, and records were kept afterward."

He Xin agreed in a deep voice. "I understand. We must proceed strictly according to the plan and never act rashly."

The division of labor was fixed. The three of them each had their own responsibilities, checked and balanced each other, and provided backup for one another, with everyone keeping a close eye on this grand scheme of the century.

He Yuzhu concluded by stating his approach: "The three of you will be stationed in Hong Kong to oversee and implement all the plans."

"I stay in a courtyard house in Beijing. I keep a close eye on every major overseas crisis, institutional collapse, and market turning point."

"I'll strategize the big picture; you'll handle the execution."

The three brothers now understand their father's overall plan and are full of confidence and anticipation for this operation to establish their rule.

The He family's path to becoming a global hidden capital magnate and an uncrowned global conglomerate officially began to unfold in the depths of winter in 06.